Seventeen out of 26 insurers whose solvency margin ratios (SMRs) were assessed by the insurance regulator, Central Insurance of Iran (CII), have been deemed fully capable of meeting their commitments to policyholders.
The CII has called on the public to look to insurers’ SMRs as an indication of the companies’ competence when purchasing policies, reported Financial Tribune.
Iran Moein Insurance, one of a handful of firms authorised for operation in free trade zones (FTZs), tops the list of general insurers in this area. Its SMR is 589% for the current fiscal year ending 20 March 2017. The firm is affiliated with state-owned Iran Insurance Company.
CII said that assessments for each year are based on insurers’ performance for the previous year, and therefore newly established insurance firms are not included in the list.
Sarmad Insurance, affiliated with Bank Saderat Iran, has the highest SMR among mainland insurers at 366%. Mellat Insurance and Ma Insurance – both affiliated with Bank Mellat – are next with their SMRs reaching 233% and 196%, respectively.
Amin Re, also licensed to operate in FTZs, and Iranian Reinsurance, affiliated with Bank Pasargad Iran, were reported to have SMRs of 1,636% and 738%, respectively. The two companies are the only reinsurers in Iran.
Meanwhile, the CII’s Office for Financial Supervision has classified insurers into different categories according to their solvency ratios.
Iran Insurance Company, the only fully state-owned firm operating in the market, and Hafez Insurance, licensed to operate in FTZs, are firms with the lowest SMR. CII has tasked them with developing a one-year reform plan. They need to reduce their sales, cut executive compensation and stop investing in low-profit businesses.
Other insurers which failed to meet solvency requirements have been asked to submit two- or three-year plans outlining how they would improve their current financial positions. The regulator is considering allowing these firms to raise their capital.